Investments Gained $175,000 YTD. Time to Celebrate by Cleaning?!
July maintained solid returns of 5% for our household. Compounding interests from our assets are moving quickly. We surpassed $1.2 million in our total investment portfolio and are on pace to hit $2 million net worth by year’s end.
There are still tariff resolutions to contend with, along with our president’s temper. It seems that major trade partners, excluding Brazil, India, and China, are going along with empty promises. When we took the mid-year trip, I realized that prices due to inflation and/or tariffs are recalibrating values at all checkouts.
For now, it seems like we are all in for a wild ride with the hopes that wars and conflicts lessen. I’m not a fan of global leaders puffing their chests while people on the ground are dying or suffering needlessly. The world is indeed big enough for all of us to get along. As for our household, we are taking out wins where we can and praying for our neighbors (global and domestic).
First, we are kicking things off with a trip to Tallahassee to reconnect with friends and even rock climbing. More importantly, we are taking inventory of the rental property for our new tenants. Out-of-state rental management is hard work.
Table of Contents
How Investments Add to Your Wealth
Based on the Federal Reserve Survey of Consumer Finances (2022), the current median US household wealth should be around $215,000. This number will be updated near the end of October. Of that total, nearly 45% is home equity ($96,750). By contrast, their stock position hovered around 15% ($31,700). That’s not a good thing. To be financially efficient, your home equity portion should not exceed 30%. Why? The main reason is liquidity.
Most people aren’t likely to sell their home, especially if it’s paid off. Doing so would only lead you to find a new way to pay for housing (again). In 2024, Business Insider found that most baby boomers are struggling to find affordable housing to downsize into. To avoid this costly future mistake, you need to evaluate your total wealth sooner rather than later. Your wealth should be divided as follows: 44% in equities and mutual funds, 17% in Real Estate, 6% in pensions and retirement funds, 17% in businesses, and 16% in other assets.
From 2020 to 2025, the S&P 500 returned 92.06%. Over the same period, the average annualized real estate return was 26.72%. While it’s not a competition between owning a home or stocks, the average annualized difference of 13% has an oversized long-term impact. Over time, the goal is to own both and split them in a way that you win. This is even more important as inflation erodes our wealth annually by around 4-5%.
Before we jump ahead again
For those new to the term “wealth,” it’s synonymous with net worth. Net Worth is equal to your (total) Assets minus (total) Liabilities. A simple definition is what you own vs what you owe. The best way to fix your household wealth equation is to:
- Spend Intentionally (on the stuff you need and truly love),
- Increase your income (when and where possible), and
- Invest the difference (in owning quality assets).
The investment component is fun since you can mix and match. You can invest in improving your soft skills, technical skills, or education. This would add to your innate human capital, i.e., Confidence, Focus, and Charisma. You can also invest indirectly through your 401k (or equivalent) and/or directly in the stock market. The goal here is to add to your financial stability, which in turn converts “No” to “Yes”. Additionally, this may include investing in valuable networks, i.e., relationships, organizations, etc. There you have it, those are the supposed secrets of the wealthy.
Those secrets helped my family’s net worth go from negative $155,000 to nearly $2 million in 11 years.
Reflecting on Simpler Times
In July 2016, I went on my first solo trip to Brazil for the Olympics. While it was intimidating, it pushed my boundaries mentally. So much so that I purchased a Condo (October 2016). I now realize how pivotal and transformative every moment is. Each decision compounds into the next good decision. Future opportunities are in part a function of your wealth.
While most people didn’t believe me at first, throughout the process, it became apparent that it’s not something you can force on people. They either want to be wealthy and stress-free, or they don’t. It’s not even about the money. Your investments are a function of ‘Time,’ the most limited asset you own. All we can do is share every tip, tool, and strategy so that you can make the best of your time.
You can’t say we never tried to help.
4 Years since the Business Insider Feature, Inflation/Recession scares are still warring strongly
While the year started cautiously at best, the market continued to roar with the strength of AI and the hope that Trump would settle down. And so we thought.
Inflation hit a peak of 9.1% back in June 2022, and the Federal Reserve took even more restrictive action. After a few bank collapses and more than enough layoffs, we are back at sub-3% inflation. The market rallied from the news, which sent stocks soaring, specifically Tech stocks. We’ve been battling for our lives ever since.
With the S&P 500 hitting 8% year-to-date, we might have capped the year at the expected 15%. But what about…
Recession?
Well, not quite, but not bad. Investors panicked and started taking profits post Trump Liberation Day. Fear spread to my beloved NVDA position, and billions were lost. Most financial experts feared one problem: “a few companies are carrying us.” Just like that, money flowed from Large caps to Small caps, in what’s being called the Great Rotation.
And then tariff deals and earnings started pouring in. As employment numbers get revised, it’s apparent that Americans were struggling to keep food on the table. Why? It’s a rolling recession. If you have money and means at the start, you are hurting but not so much. However, if you were living paycheck to paycheck, the debt is mounting up.
With no Federal rate cuts coming, it’s a matter of time until the bottom falls, but not until 2027. Why? 2026 is the 250th anniversary of the US. If I know Americans, we always rally to celebrate. At least that’s my hope.
What’s it like on our end?
Through the endless motions of the market, we kept investing. Our Investments are down almost $80,000 by mid-April. It’s nearly biblical out here; however, we are up over $100,000 in gains in our combined portfolios by June. The long-term strategy pays off, even if the pain train is coming.
Prices are up. Eating dinner is now close to $200 in the DMV. Just hanging out for a quick cafe turned into an $80 fee. Tipflation is causing us to stay home; it’s not fun enough outside. To compensate, the average American will have to make a tough choice. You can either change your financial habits or be forced to change. Most are abandoning the movie-going experience altogether.
It’s too expensive outside.
My wife and I suggest that you get off the Hedonic Treadmill. It’s no fun, spending more money, hoping for a raise, and only to spend more money again. With all of that said, this article will showcase the TNFG monthly Net Worth Breakdown for July 2025, where making money makes sense. In addition to our household wins and losses, we always drop useful financial nuggets and aha moments that might help you along your financial freedom journey.
What a long intro this month.
A Million More Mental Problems and Brownie is back!
Recap on this season of our life. Post-pandemic is churning out mental health issues. So much so that crime is up. The world is struggling to keep up with wealth inequality. Europeans are throwing water at tourists. Check with your friends as we cope with another global issue. Money is dwindling for food, gas, and utilities. It’s as if we stumbled on the struggle multiverse timeline.
As difficult as it may seem, we’ve been in this staggered lifestyle for almost five years. And it hadn’t been easy on most people. The best way to cope is to start with a 5-10-20-year plan. Most of our problems are vested in the idea that we aren’t living with any true purpose. We are waiting for things to merely happen to us and for us. It’s the entitlement matrix.
You have to break free and create your own story. I don’t value labor, so we are headed for the financial freedom exit.
Shifting Post July to the 2nd Half of the Year
Hardcore Planning Season from July to December
Day by day, it might seem like a hurdle, but wealth is counted in the long term. To stay focused, we are moving forward with renovating our current home and purchasing a new one in 2026. As such, we are investing while paying off debt.
The goal by the end of 2025 is about +$100,000 net worth growth (to hit $2 million). So far, this year has had misses than hits. The 2020-2021 investing cycle was easier by comparison, so the wins come harder and are way more deliberate.
At this stage, it’s all about holding on to big wins in 2026. 2025 is more defense than offense. I expect a relaxed finish in Q4; the market will likely settle at around +15% for the year.
Here’s Our Monthly Net Worth Summary Overview:
So What Happened?
Our assets and liabilities improved by 3.53% and 0.74% respectively. This resulted in an overall net worth increase of 3.99%. Grateful for the climb.
S&P for July rose by 2%. With all the pent-up energy, Americans are looking for an emergency Fed rate cut. This is likely one of the best opportunities to invest when the market is arbitrarily subdued. If you aren’t invested, you will miss out.
For now, don’t anticipate good times. It’s more likely that there will be a slight drop in mid-August and again in October. This will reflect a drop in spending across the board. Companies are expected to dish out discounts and sales for Black Friday. The recession is nearly avoided.
Either way, my wife and I are shifting to:
- Back to stacking 10% worth of investment cash for future opportunities,
- Consider shifting asset allocations with more Utilities + Energy,
- Considering buying more shares of stocks that hit a record low (-30%), and
- Rebalancing where needed.
Our Expenses for July 2025
FIRE Cash Flow for July 2025
With the Brazil trip coming up in December, time to count macros and decrease luxury eating because over $1,000 for Food and Dining is ridiculous. Let’s go over our July cash flow. It’s essential to note that we aren’t on a strict budget per se; we typically spend around $5,000 per month.
We use the Net Max Budgeting method, which allows flexibility in how we spend. As long as there is $3,250 in our checking account to start the next month’s expenses, we are covered. After that, we pay expenses and invest the difference.
Income:
My wife and I are mid-tier professionals living in the Washington D.C. area. Around these parts, they paid pretty well. We pull in about $210,000 gross salaries (combined). Our take-home is around $9,600 per month after deductions. We pulled an extra $1,400 per month from our rental property. Net of expenses, it’s closer to $150 per month.
Expenses:
Most household expenses comprise over 70% of housing, transportation, and food. We manage things differently. While financial influencers opt for paying off debt or cutting down small expenses, we keep the big-ticket items smaller.
Our total housing (including utilities) cost peaks at 20% (excluding the rental property). The trouble zone is our auto, which comes out to 18%. The average total food cost monthly is around 11%. Our big three numbers are 21% less (a cash value of $19,000). Every dollar counts.
Those auto expenses are kicking our butts for the 2023 car. The car insurance came in at $860 with the monthly car loan of $893. At least our grocery bills seem reasonable this time at $1,000 since we front-loaded the first week of April. The flight for the rental property is taxing up, but it can’t be helped during a turnover year.
What is the Next Step beyond July?
What’s the deal for August?
We are headed ‘South’ (Rental repair again). It’s time for cleaning, HGTV with no cut scenes. Still a much-needed family recharge time for me. Brownie (our dog) will be there to supervise and provide security.
The world is getting smaller, so why not travel? With money getting tight, travel domestically for great bargains. I’m still hoping Google Maps acknowledges me with money; we have over 250 million views. That’s got to be worth something one day.
Beyond that, here are our overarching goals for 2025:
- Keeping our expenses where they should be by “Not equating happiness and social acceptance based on the money you spend.“
- Hold on to our recession-proof investment strategy through Q4 2025.
- Get to $30,000 in M1 Finance, focusing on Growth and Dividend Income that generates at least +$3,000 in passive income by year-end. Check out the portfolio in real time. If you like the platform and want to start investing, I have the $10 for $10 referral if you need it – https://m1.finance/SYdqDJ2SyADC.
- Shooting for a sustainable $1.5 Million Investment Portfolio by June 2026. To help monitor your savings, cash flow, net worth, investments, retirement, and more for free with Personal Capital. Now known as Empower, a name change similar to Twitter going by X. Sign up with my link & get a $20 Amazon gift card. *Terms apply. https://pcap.rocks
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